Are you eligible for a tax refund? That’s good news if you are. It means you have remitted more tax than necessary. Taxpayers get a tax refund at the end of the year if they have too much money withheld. The same is also true for entrepreneurs once the small business tax season starts.
Self-employed people get tax refunds if they overpay their estimated taxes. While many people think of refunds as free money, it is usually a loan you give to IRS without any interest. You can file your returns either in-house or outsource the services through platforms such as Taxfyle for accurate and error-free tax preparation.
The Process of Your Tax Refund
Not everyone knows the process involved in a tax refund. While some don’t have any idea where and how to file for their tax refund, others are clueless that they are actually qualified to file for one. Either way, it’s important that you know the entire process of tax refund so you’ll know what to do by the end of the year. Knowing this information will also help lessen stress and ensure that you’re not deprived of your rights as a taxpayer.
The process of tax refund depends on the way one files their taxes. When the government gets your tax returns and processes your information, your tax refund is approved before remitting the money. The returns for tax refunds done electronically are sent out in less than 21 days after your information is obtained by the IRS. However, the process can also take up to 12 weeks before receiving the money.
There are different reasons that can lengthen the period taken for tax refunds. Overwhelmed tax preparers and budget delays are some of the reasons for delayed tax refunds. If you don’t have any idea how this process works, consider reaching out to tax authorities for you to learn more. The earlier you do this, the faster you can process your tax refund and avoid any penalties during the process.
How to Claim Your Tax Refund
There are several ways on how you can claim your tax refund. You can opt to go for a direct deposit tax refund for your money to be deposited in different accounts such as retirement or savings account. Alternatively, you can request the government to send you a paper check to your mail. You have three years from the initial filing day to claim your tax refund. Sometimes IRS makes a mistake and sends you money than they should have. If this happens, it is advisable to wait before spending the money. Don’t think that you can immediately spend the overpayment since the IRS can detect this error in the future. Once this happens, the overpayment will be credited to your tax payment and might require you to pay for penalties to compensate for your spending. If you notice that the IRS made an overpayment with your tax refund, let them know about the error so they can come up with solutions right away.
If you are eligible for child support or accrued student loan bill, some of your tax refunds can be deducted to cater to those debts. So before making any claim about incorrect figures, you should establish if there are debts you are supposed to pay. If you are paying student loans or servicing credit card balances, it is better to use the money from tax refunds to settle such debts.
Claiming your tax refund from either of these options comes with several pros and cons. If you have the liberty to choose a specific method, look at the bigger picture and compare these. Don’t make rash decisions thinking that one method is automatically better than the other.
Getting Your Tax Refund
Upon filing your taxes, you may be worried about when the refund will reflect in your mail or account. The IRS has a feature on their website that indicates the progress of your tax refund. This feature requires you to enter either your Social Security number or tax identification number, and then it notifies you whether the tax refund is on the way or if there is a problem that needs to be addressed. If you just filed for a tax refund, it’s best if you regularly use this feature to keep you posted. This will make it very easy for you to determine when your tax refund will be reflected in your account or if there were any problems during the process.
Alternatively, you can use the IRS2GO mobile app that gives your tax refund status. This app is suitable for most handheld devices, making it very convenient for you to gain updates about your tax refund.
Your refund can miss or delay if you have recently moved or changed your address. After updating your address, the IRS can then send you a replacement check. If you have moved to a different state, you need to visit the State’s Department of revenue.